Natural justice and proof of unexplained income failed where reassessment lacked fair opportunity and the Department did not prove receipt.

Reassessment proceedings under section 144B failed where the assessee was not given a reasonable opportunity, and the reasons, sanction, and supporting material were not furnished; the reassessment was therefore vitiated for breach of natural justice and could not be sustained. An addition as unexplained income under section 69A also failed because the Department did not prove that any amount was actually received or credited in the assessee's bank accounts, while the assessee produced bank statements and denied the alleged transaction; the addition was deleted.

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Issues: (i) Whether the reassessment proceedings were vitiated for want of reasonable opportunity, non-furnishing of reasons and allied material, and violation of section 144B of the Income-tax Act, 1961. (ii) Whether the addition made as unexplained income under section 69A of the Income-tax Act, 1961 was sustainable on the facts.

Issue (i): Whether the reassessment proceedings were vitiated for want of reasonable opportunity, non-furnishing of reasons and allied material, and violation of section 144B of the Income-tax Act, 1961.

Analysis: The assessee was given only a few minutes to respond to the show-cause notice, which was not a reasonable opportunity. The relevant reasons, sanction and supporting documents were not furnished, and the assessee was not effectively confronted with the material relied upon by the Department. Such a manner of proceeding offended the requirement of fair procedure under section 144B.

Conclusion: The reassessment proceedings were vitiated by violation of natural justice and section 144B and could not be sustained.

Issue (ii): Whether the addition made as unexplained income under section 69A of the Income-tax Act, 1961 was sustainable on the facts.

Analysis: The Department failed to establish that any amount was actually received by the assessee or credited in the assessee's bank accounts. The assessee produced bank statements and denied any transaction with the alleged entity, while the Department did not place the alleged bank material on record or discharge the evidentiary burden to prove the addition.

Conclusion: The addition under section 69A was not justified and was deleted.

Final Conclusion: The assessee succeeded both on the procedural challenge to the reassessment and on the merits of the addition, resulting in complete relief.

Ratio Decidendi: An addition or reassessment cannot stand where the assessee is denied a reasonable opportunity and the Department fails to discharge the burden of proving the alleged receipt or unexplained money with cogent material.

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